Business registration procedures for foreigners in Vietnam

Vietnam is attracting a lot of foreign investors to work and live in its territory. Due to the open trade mechanism, many foreign business organizations have appeared in recent years. However, to set up a company in Vietnam, foreign investors have to carry out procedures that are more complicated than locals. in this article, LSX legal firm introduces: “Business registration procedures for foreigners in Vietnam”

Legal ground

• Law on Investment 2020

Form of investment of foreigner

Under the law on Investment 2020 of Vietnam, foreign investors can conduct the following forms of investment in Vietnam:

• Firstly, investment in the establishment of a business entity.
• Secondly, investment in the form of capital contribution or purchase of shares or stakes.
• Thirdly, the execution of an investment project.
• Fourthly, investment in the form of a business cooperation contract.
• New forms of investment and types of business entities prescribed by the Government’s regulations.

Investment in the establishment of a business entity

According to Article 23 of the law on Investment 2020:

• A foreign investor that establishes a business entity shall satisfy market access conditions applied to foreign investors specified in Article 9 of this Law.
• Before establishing a business entity, the foreign investor must have an investment project and follow the procedures for issuance or adjustment of an investment registration certificate, except for the establishment of a small and medium-sized start-up enterprise and a startup investment fund in accordance with the regulations of the Law on Small and Medium-sized Enterprises.
• From the date on which the enterprise registration certificate or an equivalent document is issued, the business entity established by a foreign investor shall be the investor that executes the investment project set out in the investment registration certificate.

Conduct of investment activities by foreign-invested business entities

Article 23 of the Law on Investment 2020:

1. When establishing a business entity, when making an investment by contributing capital, purchasing shares or purchasing stakes of a business entity, or when making an investment under a business cooperation contract in one of the following cases, the foreign investor must satisfy the conditions and follow investment procedures applied to foreign investors:
a) Over 50% of its charter capital or more is held by a foreign investor(s) or the majority of the general partners are foreigners if the business entity is a partnership;
b) Over 50% of its charter capital or more is held by a business entity(ies) mentioned in Point a of this Clause;
c) Over 50% of its charter capital or more is held by a foreign investor(s) and a business entity(ies) mentioned in Point a of this Clause.
2. Business entities other than those mentioned in Points a, b, and c Clause 1 of this Article shall satisfy conditions and follow investment procedures applied to domestic investors when establishing a business entity, when making an investment by contributing capital, purchasing shares, or purchasing stakes of a business entity or when making investment under a business cooperation contract.
3. If a foreign-invested business entity that is established in Vietnam has a new investment project, procedures for executing such investment project shall be followed without having to establish a new business entity.
4. The Government shall elaborate procedures for establishing business entities and conduct of investment activities by foreign investors and foreign-invested business entities.

Thus, in the case of Clause 1, Article 24, the investor must carry out the procedures for investment registration, then enterprise registration.
In the case of Clause 2, Article 24, investors only have to carry out business registration procedures.

Cases in which the investment registration certificate is required

Article 37. Cases in which the investment registration certificate is required

1 The investment registration certificate is required in the following cases:
a) Investment projects of foreign investors;
b) Investment projects of the business entities mentioned in Clause 1 Article 23 of this Article.
2 Cases in which the investment registration certificate is not required:
a) Investment projects of domestic investors;
b) Investment projects of the business entities mentioned in Clause 2 Article 23 of this Article;
c) Investment in the form of capital contribution, purchase of shares or stakes in a business entity;
3 Domestic investors and the business entities mentioned in Clause 2 Article 23 of this Article shall execute the investment projects mentioned in Article 30, Article 31 and Article 32 of this Law after their investment guidelines are approved.
4 Any investor that wishes to obtain an investment registration certificate for an investment project prescribed in Point a or Point b Clause 2 of this Article shall follow the procedures in Article 38 of this Law.

Procedures for issuance of the investment registration certificate

According to the Law on Investment 2020:

If the investment project is subject to approval for its investment guidelines as prescribed in Article 30, Article 31, and Article 32 of this Law, the investment registration authority shall issue the investment registration certificate to the investor within the:

• 05 working days from the receipt of the written approval for investment guidelines and the written approval for an investor with respect to the investment project that is subject to the issuance of an investment registration certificate;
• 15 days from the receipt of the investor’s investment registration certificate with respect to the investment project other than that specified in Point a of this Clause.

If the investment project is not subject to approval for its investment guidelines as prescribed in Article 30, Article 31, and Article 32 of this Law, the investor shall be issued with the investment registration certificate if the following conditions are met:

• The investment project does not involve any banned business line;
• There is a location for the execution of the investment project;
• The investment project is conformable with the planning specified in Point a Clause 3 Article 33 of this Law;
• The investment per m2 (or investment per employee) is not smaller than the minimum requirement.
• Market access conditions applied to foreign investors are satisfied.

Procedures of company registration

Step 1: Prepare dossiers

Step 2: Submit dossiers

Submit the application at the Business Registration Office of the Department of Planning and Investment at the province level where you plan to locate the head office of your Company.

Currently, there are two forms to submit an application:

• Register directly: apply at the “one-stop” department of the Business Registration Office. However, in Hanoi, this method is no longer applied.
• Besides, online business registration: submit your application on the National Business Registration Portal (Address: https://dangkykinhdoanh.gov.vn). After the online application is valid, you will have to go directly to the “one-stop” department to return the scanned copy (hard copy) when submitting it online. However, this method is relatively complicated, requiring you to have skills and knowledge about registering a business account.

Once you have submitted your application, you will receive a receipt for your application. Then, usual processing time for applications will be 3 working days.

Step 3: Receive result

According to the schedule on the appointment, you return to the “one-stop” department of the Business Registration Office to receive the results. There are two possible scenarios:

• Dossiers valid: You will receive a Certificate of Business Registration as a result and a notification to the tax authorities.
• In contrast, dossiers invalid: The Business Registration Office will have a document instructing you to amend the dossiers in accordance with the provisions of the law. After the amendments and supplements to your application according to this guide, then resubmit your application as in Step 2.

Legal service of LSX Legal Firm

LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:

• Legal advice related to new regulations;
• Representing in drafting and editing documents;
• We commit the papers to be valid, and legal for use in all cases;
• Represent to submit documents, receive results, and hand them over to customers.

With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.

Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.

Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.

After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.

Contact LSX

In this article, we provide information regarding “Business registration procedures for foreigners in Vietnam”. With qualified solicitors, LSX legal firm has provided efficient legal services to our customers. We guarantee to constantly update and keep our operations as well as services in line with the law. If you have any questions about the law, please get in touch with us via LSX Law firm: +84846175333 or Email: [email protected]

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Conclusion: So the above is Business registration procedures for foreigners in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com